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        T R O U B L E D   C O M P A N Y   R E P O R T E R

                           E U R O P E

           Thursday, January 31, 2002, Vol. 3, No. 22


                            Headlines

* F I N L A N D *

SONERA CORP.: Buys Remaining 10% of Tilts for EUR34MM

* F R A N C E *

LANDTEL FRANCE: Under Observation for Three Months

* G E R M A N Y *

EM.TV: Constant Venture Finalizes Funding for Klatten Stake Buy
GONTARD & METALLBANK: Investors Assure EUR15.3MM Lifeline

* I T A L Y *

ALITALIA SPA: Will Sell Convertible Bonds, Minister Says
BLU SPA: Receives Five Expressions of Interest
IPSE 2000: Risks Losing 3G License

* L U X E M B O U R G *

CARRIER1 INTERNATIONAL: Will Outsource IT Development in India

* N E T H E R L A N D S *

KPN NV: Faces Lawsuit for Posting Misleading Price

* R U S S I A *

TV 6: Appeals Against Cancellation of Broadcasting License

* S P A I N *

ISLA MAGICA: To Reach Agreement With Creditors or Face Bankruptcy

* S W E D E N *

LM ERICSSON: Gets Three Contracts in Oman

* S W I T Z E R L A N D *

4M TECHNOLOGIES: Shares Suspended as Creditors Meet

* U N I T E D   K I N G D O M *

BARINGS BANK: Ex-Finance Chief Makes Fraudulent Representations
BRITISH TELECOM: BT Ignite Plans Overhaul of European Operations
CEDAR PLC: Warns Investors of Insolvency With a Collapsed Deal
EGG PLC: Buys Zebank for GBP23.5MM
NTL INCORPORATED: France Telecom Will Not Rescue NTL
NTL INCORPORATED: Microsoft, AOL, Liberty Media Eye Cablecom
NTL INCORPORATED: Mulls Sale of Australian Unit to Pay Debt
NTL INCORPORATED: Sinks 15.2% Ahead of Anticipated Deal
P&O PRINCESS: Investors Back Royal Deal Despite Referral


=============
F I N L A N D
=============


SONERA CORP.: Buys Remaining 10% of Tilts for EUR34MM
-----------------------------------------------------

Helsinki-based Sonera Corp., an international forerunner in
mobile communications and mobile-based services and applications,
has purchased the rest of the shares (10%) in Tilts
Communications from the International Finance Corporation (IFC),
the Telecom Paper reported Tuesday.

Sonera paid approximately 34 million euros for the shares. The
company now owns 100% of Tilts.

Tilts, which owns 49% of fixed network telecommunications
operator Lattelekom, is currently involved in arbitration
proceedings with the Republic of Latvia, related to the
shortening of Lattelekom's period of exclusive rights from the
end of the year 2013 to the beginning of 2003.

In 2000, Lattelekom's revenues amounted to 248 million euros and
its net profit was 42 million euros. At the end of year 2000,
Lattelekom had altogether 735,000 subscriber lines.

Sonera was forced to sell off assets and organize in November a
billion-euro rights issue to pay down debts of around 3.5 billion
euros.


===========
F R A N C E
===========


LANDTEL FRANCE: Under Observation for Three Months
--------------------------------------------------

The commercial court of Paris has placed telecom operator Landtel
France into administration on January 24 and has put the company
under observation for three months, the Les Echos/FT Information
reported.

Landtel has local radio loop licenses for seven French regions.
It is so far only operating the technology in Ile-de-France as
the group's German division failed in August.

The operator says that by the end of the three-month observation
period, during which the company will be fully operational, a
continuance plan will have been devised.

Landtel is in talks with other operators, most notably Altitude,
regarding an acquisition or merger.


=============
G E R M A N Y
=============


EM.TV: Constant Venture Finalizes Funding for Klatten Stake Buy
---------------------------------------------------------------

Dutch venture capital company Constant Ventures has finalized the
financing for the purchase of a 24.8% stake in EM.TV &
Merchandising AG by the struggling German media rights group's
chairman, Werner Klatten, Dow Jones Newswires reported.

Earlier this month, EM.TV said Constant Ventures would finance
Klatten's purchase of 36.2 million shares through a convertible
loan.

At that time, Constant Ventures' funds for the loan were
unsecured, but the venture capital group has now found investors,
enabling the deal to be carried out effective January 31.

The shares being bought by Klatten come from the holding Thomas
Haffa, who stepped down as EM.TV chairman last year.

Constant Ventures has the option of converting the loan in the
medium term into EM.TV shares or into the shares of WKB
Beteiligungsgesellschaft mbH, the holding company set up by
Klatten.

Other details of the loan were not disclosed.

The change of ownership of the stake marks a break with the
company's troubled past under Haffa, when EM.TV's soaring stock
market valuation gradually crumbled under the weight of
overvalued acquisitions and mounting losses.

German prosecutors said in November they were bringing criminal
charges against Thomas Haffa and his brother Florian, the
company's former financial officer, for allegedly making false
statements and manipulating the company's share price.


GONTARD & METALLBANK: Investors Assure EUR15.3MM Lifeline
---------------------------------------------------------

The planned capital increase by Frankfurt-based bank Gontard &
MetallBank AG (German Securities Code 589 050) has already been
fully guaranteed by various investors.

In a report from the Frankfurt Stock Exchange, these investors
have committed to subscribe to those shares, which may not be
placed through the exercise of subscription rights.

Therefore, the placement of the EUR15.3 million capital increase
against cash contributions is assured.  .

The new shares will be offered to all shareholders from February
1 to 18 February 2002 for EUR1.00 per share, by way of a 9-to-4
subscription right.

Trading in the subscription rights (German Securities Code 589
058) will take place from February 1 to February 14.

Gontard & MetallBank, whose primary business categories include
investment banking, holding participating interests in innovative
pre-IPO companies and asset management, expects its shares to be
listed at the stock exchange on February 22.

The company in December said it would face insolvency if it fails
to find fresh equity. The bank's equity no longer meets the legal
minimum requirements of 8%. At present, its equity amounts to
only 4.6% of its lending volume.

For information, contact Dr. Stefanie Knetsch-Hack, Investor
Relations, at telephone +49 (69) 71908-203 or Patrick Kiss at
telephone +49 (69) 71908-206 or via e-mail at info@gmag.de


=========
I T A L Y
=========


ALITALIA SPA: Will Sell Convertible Bonds, Minister Says
--------------------------------------------------------

Industry Minister Antonio Marzano said Alitalia's state-approved
business plan would call for the airline to sell its bonds that
will be convertible into its own stock by mid-year, Bloomberg
reported Tuesday.

The carrier seeks to raise over 1 billion euros (US$866 million)
to ensure the company's survival, Marzano noted, without giving
further details.

The Italian airline foresees a return to profit by 2003 if it
receives 380 million euros in state aid and if the company can
raise between 1.2 billion and 1.4 billion euros in the first half
of this year.

The airline expects to achieve net income of 25 million euros in
2003.

If the airline sold convertible bonds, Italy would have the right
to acquire enough to maintain its 53% stake, or if it opts not
to, the state might see its holding diluted.


BLU SPA: Receives Five Expressions of Interest
----------------------------------------------

Blu SpA has received five expressions of interest for the assets
of the Rome-based mobile phone operator.

Telecom Italia Mobile SpA, Vodafone unit Omnitel Pronto Italia
SpA, Enel-controlled Wind SpA, Hutchison Whampoa-backed H3G SpA,
and Autostrade-Sitech SpA had expressed interest in buying the
company's assets.

Blu said earlier this month that it had hoped to receive buy-out
offers by the end of January.

Blu's future has been in doubt since October 2000 when it became
the only European mobile company not to buy a permit for high-
speed phone access.

Shareholders, including BT Group Plc (29%) and Autostrade SpA
(32%), have decided to sell the company as a whole or by bit by
bit.

Blu was valued at 1.2 billion euros ($1.04 billion) last month
when Mediaset SpA sold its 9% stake to BT. Analysts said Blu
would sell at a price well below that.

A BT spokesman warned earlier that Blu could be forced to close  
if a buyer could not be found to take over the struggling mobile  
group.  
  
The company did not say how much would be needed to keep it  
operating.


IPSE 2000: Risks Losing 3G License
----------------------------------

Ipse 2000, the cash-strapped third-generation mobile consortium
led by Telefonica Moviles, risks losing its 3G license should its
board decide to freeze operations in a bid to decide on its
future strategy, Dow Jones Newswires reported.

A freezing of Ipse's operations would mean the consortium would
not meet pledges on the timing of the rollout of its network that
are required in the license contract.

Ipse paid around 2.44 billion euros for the license itself, not
including extra frequencies offered to market newcomers. Some
reports also said the Communications Ministry could sanction
Ipse.

A meeting by Ipse's board of directors in November failed to
yield final approval for the company's business plan, leading to
rumors that it could suspend or even liquidate the project
because of financing difficulties.

Ipse reportedly does not have money to pay its employees or pay
its bills, absent a fresh cash injection.

Ipse 2000, is owned 45.59% by Telefonica Moviles, 12.55% by the
Finnish operator Sonera, 12% by Atlanet, 10% by Banca di Roma; 5%
by Xera S.p.A.; 5% by Edison-Falck; and 4.8% by Goldenegg, with
the remaining 5% held by other shareholders.


===================
L U X E M B O U R G
===================


CARRIER1 INTERNATIONAL: Will Outsource IT Development in India
--------------------------------------------------------------

Unprofitable Pan-European bandwidth provider Carrier1 will
outsource its applications development to NCMR, a software
development company in India, the Telecom Paper reported.

The outsourcing to NCMR is intended to cut costs and increase the
capacity of Carrier1's IT department to a level where we can
deliver end-to-end automation of most business processes.

NCMR will begin its outsourcing function next week with delivery
of the first completed projects expected by the end of March.

As of January 22 the company had approximately US$88.4 million in
cash and cash equivalents, restricted cash and available-for-
sale-securities, as compared to US$133.7 million in September
2001.

The company struggled after prices for its services slumped and
growth in data transmission slowed. In the third quarter of 2001,
the company posted a loss of $495 million.

Contact Keith Johnson via e-mail at keith.johnson@carrier1.com;  
or telephone +4 20 7001 6000 for more information.


=====================
N E T H E R L A N D S
=====================


KPN NV: Faces Lawsuit for Posting Misleading Price
--------------------------------------------------

Royal KPN NV received another blow as One.Tel filed a lawsuit
against the Hague-based telecommunications company for posting
misleading price information to customers, the Telecom Paper
reported.

One.Tel said that the mailing called "voordeel of vooroordeel"
(advantage or prejudice) is incomplete about comparing its prices
with those of carrier (pre)select companies like One.Tel.

KPN compares its discount numbers with One.Tels regular numbers,
while One.Tel also has discount numbers and calling abroad is not
mentioned at all.

KPN has earlier cut its debt via the re-purchase of 175 million
euros of its own bonds. Of the original total of 3.5 billion
euros in bonds outstanding in 2002, the figure now stands at
3.325 billion euros.

German-owned broker Deutsche Bank estimated KPN's net
consolidated debt to be around 16 billion euros at year-end 2001,
compared with 22.3 billion euros in September.


===========
R U S S I A
===========


TV 6: Appeals Against Cancellation of Broadcasting License
----------------------------------------------------------

TV-6, Russia's last remaining national television station
controlled by exiled Russian businessman Boris Berezovsky, has
filed an appeal against the actions of the bailiff to the Moscow
Arbitration Court, RosBusinessConsulting reported.

The bailiff earlier obliged the Media Ministry to revoke the TV
company's license for broadcasting.

In its petition, the TV company asks the court to cease the
receiving proceedings initiated by the bailiff.

A decision on whether the appeal would be taken into
consideration should be made within the next few days, RBC added.

LUKoil pension fund unit LUKoil-Garant, which holds a 15% stakein
TV6, initiated the bankruptcy suit against the station. The
Moscow Arbitration Court ruled to liquidate the TV company in
September 27.


=========
S P A I N
=========


ISLA MAGICA: To Reach Agreement With Creditors or Face Bankruptcy
-----------------------------------------------------------------

The majority shareholders of Spanish theme park Isla Magica will
file for bankruptcy unless an agreement with its creditors is
reached in the near future, the Expansion reported.

According to Jose Maria Bueno Lidon, chairman of Spanish savings
bank El Monte, Caja San Fernando and Unicaja are negotiating a
reduction of Isla Magica's EUR36 million debt with the creditor
banks, headed by Banco Bilbao Vizcaya Argentaria.

Caja San Fernando and Unicaja control 75% of the park.

Parques Reunidos SA was earlier said to be in talks to acquire
the Isla Magica theme park in Seville.


===========
S W E D E N
===========


LM ERICSSON: Gets Three Contracts in Oman
-----------------------------------------

Stockholm-based telecom equipment maker LM Ericsson signed three
contracts worth 9.240 million rial ($3.54 million) with the
state-owned Oman Telecommunications Co. to expand and upgrade
fixed and mobile phone systems in Oman.

According to a report from the Dow Jones Newswires, the
agreements were signed in the Oman capital Muscat with Oman
Telecommunications chairman, Transportation and
Telecommunications Minister Malik al-Muammari.

LM Ericsson recorded a loss of SKr21.1 billion ($2 billion) for
2001, or SKr30.3 billion after including restructuring costs and
exceptional gains, and an SKr5.1 billion in the final quarter.


=====================
S W I T Z E R L A N D
=====================


4M TECHNOLOGIES: Shares Suspended as Creditors Meet
---------------------------------------------------

Shares of 4M Technologies, the Yverdon-les Bains-based
manufacturer of production systems for optical discs, were
suspended Tuesday at the company's request.

According to a Dow Jones Newswires report, the request was made
due to an ongoing creditors' meeting.

4M filed for protection from creditors in September 2001 after it
was hit by the sharp downturn in the technology business.

Earlier, 4M said that it is currently in discussions with private
investors to find further financing but that nothing has been
completed yet.

Dealers say that competitors Toolex International NV of
Netherlands and Steag AG and Singulus Technologies AG of Germany
could be possible investors.

4M Technologies reported for the nine months ending September 30
a net loss of 33.4 million Swiss francs, compared to a loss of
60.9 million Swiss francs in 2000.


===========================
U N I T E D   K I N G D O M
===========================


BARINGS BANK: Ex-Finance Chief Makes Fraudulent Representations
---------------------------------------------------------------

Simon Jones, the former finance director of Barings' Singapore
subsidiary, made fraudulent representations about certain
Singapore operations, inducing the accountants to provide a
favorable audit opinion, it was alleged at the High Court in
London Monday, the Financial Times reported.

U.K.-based Barings bank collapsed in 1995 after Nick Leeson, the
Singapore-based trader who brought down Barings bank, accrued 830
million pounds ($1.2 billion) losses on unauthorized trading in
derivatives.

In the case being heard in London, Barings liquidator KPMG is
alleging negligence against Deloitte & Touche, which audited the
bank's Singapore subsidiary in the early 1990s.

Deloitte hopes to prove that it should not have to pay damages
over the bank's demise, but the collapse should be blamed on
Barings management.

Lawyers representing Deloitte & Touche's Singapore office claimed
that Jones signed representation letters that were actually
completely false because the activities of Leeson and people
working for him.


BRITISH TELECOM: BT Ignite Plans Overhaul of European Operations
----------------------------------------------------------------

BT Ignite, BT Group's business services division, plans to
overhaul its European operations and cut several hundred of staff
in Germany to stem heavy losses.

According to a report from the Financial Times, Europe chief
Wolfgang Essig said that several hundred employees would be cut
in Germany.

BT does not provide separate figures for its operations in
Germany, but has admitted recently that its business is not
profitable. BT Ignite employs 1,500 in Germany, the majority at
its Munich subsidiary.

BT Ignite incurred an operating loss of 165 million pounds in the
first half to end-March, compared with a loss of 14 million
pounds for the same period last time.

The wider losses were blamed on the unprofitable German
operations.

BT Group has sold unprofitable businesses and spun off its
wireless unit to slash debt, which had tripled to 27.9 billion
pounds ($40.3 billion) in the year ended March 31.


CEDAR PLC: Warns Investors of Insolvency With a Collapsed Deal
--------------------------------------------------------------

Struggling Surrey-based software company Cedar plc warned its
investors that it could be forced to start insolvency proceedings
next week if the rescue bid of 3.8 million pounds collapses, the
Times newspaper reported.

Private equity group Alchemy Partners was forced to extend the
final date for unconditional shareholder acceptance until
February 4, after just 47.78% of shareholders approved the offer
of Redac Limited.

Cedar needs at least 50.1% vote from shareholders by February 4
for the deal to proceed.

Alchemy and HBOS, the group's lead creditor, will release a 34
million pounds line of credit once approval is secured.
Otherwise, Cedar could start insolvency proceedings and
shareholders will not receive any payment in respect of their
shares.

Cedar's shareholders include CGNU PLC (10.95%), Deutsche Asset  
Mgmt (4.05%), Dresdner Kleinwort Benson (3.53%), M & G Inv Mgmt  
(3.47%), Other Dirs (0.19%).

Redac Ltd., a wholly owned subsidiary of Alchemy, launched the
5p-per-share offer after the group failed in a three-month search
to find outside backing. This values the software company at 4.2
million pounds.

A profit warning in September, poor market conditions in the U.K.  
and the U.S. wiped more than 93% off the value of Cedar shares.


EGG PLC: Buys Zebank for GBP23.5MM
----------------------------------

Internet bank Egg PLC took over French Internet bank Zebank
Tuesday for 23.5 million pounds, Dow Jones Newswires reported.

"We're planning to acquire one million customers in three years
from launch and, during this time, we anticipate incurring a
profit and loss investment of around GBP100 million before
breaking into profit at some stage during 2004," Egg Chief
Executive Paul Gratton said.

Zebank had a net asset value of 31 million euros in December,
with around 70,000 customers and 120,000 accounts.

Egg has been generating losses since it was established by
Prudential in 1998. In the third quarter of 2001, pretax losses
were GBP18.4 million, from 25.5 million in the second quarter.

It, however, broke even during the fourth quarter of 2001.


NTL INCORPORATED: France Telecom Will Not Rescue NTL
----------------------------------------------------

France Telecom, which holds 18% of NTL stock and a further $5.4
billion in convertible bonds, has indicated that it will not
inject more money to bail out the cable company.

According to a report from the Daily Telegraph, France Telecom
finance director Jean-Louis Vinciguerra said that the management
of NTL was working on a financial restructuring that would not
have a cash impact on France Telecom.

NTL is expected to convert some or all of its $17 billion debt
into shares as part of its restructuring plan.

The French company owes 65 billion euros, and is under pressure
to avoid further cash commitments, particularly where they could
result in the consolidation of extra debt on its balance sheet.


NTL INCORPORATED: Microsoft, AOL, Liberty Media Eye Cablecom
------------------------------------------------------------

Microsoft Corp., cable and media giant AOL Time Warner Inc. and
AT&T Corp.'s Liberty Media Corp. are tipped as possible buyers of
Swiss cable company Cablecom, reports Dow Jones Newswires.

Debt-laden cable television operator NTL Inc is selling its
assets, including Cablecom and Premium TV unit as part of its
plan to reduce about $17.5 billion of debt, which is split
roughly equally between bank loans and bonds.

NTL's bankers last week called on Chief Executive Officer J.
Barclay Knapp to sell his 51% stake in the company to avoid
bankruptcy and resign as soon as new backers can be found.

The company is struggling to raise revenue enough to cover
interest payments, which totaled $355.7 million in the third
quarter. It owes about $111.5 million in interest on its bonds in
February, $19 million in March and about $92 million in April.

NTL is now valued at $110.7 million.


NTL INCORPORATED: Mulls Sale of Australian Unit to Pay Debt
-----------------------------------------------------------

NTL Inc. plans to sell Australian television transmission unit
NTL Australia Pty, bought less than three years ago for A$650
million ($331 million), as it raises funds to repay debt,
Bloomberg reported.

NTL Australia Pty spokesman Glen Frost declined to put a value on
the business.

Frost said the Australian business has expanded since 1999.

"If you look at what we bought at May 1999 and you look at what
we've got now, we've got a substantially bigger business because
we've won a number of contracts," Frost added.

Australian phone company Telstra Corp. and U.S.-based Crown
Castle International Corp. may be among companies interested in
buying the assets.


NTL INCORPORATED: Sinks 15.2% Ahead of Anticipated Deal
-------------------------------------------------------

Shares in NTL dropped 15.2% at 39 cents in midday New York trade
Tuesday as some in the debt market hurried to take over most of
the debt-laden cable television operator.

NTL's 12.375% euro bond due February 2008 was bid at around 34%
of face value in the late afternoon, up around a point on the
day.

NTL is in talks about a restructuring of its $17.5 billion debt
mountain through handing over about 70% of the shares to the
bondholders.

NTL has promised an announcement by the end of this week, so
anticipation is growing among investors in a company worth $11
billion just a year ago.

In December, NTL said it would axe 8,800 jobs, freeze managers'
salaries and change its focus from winning new customers to
keeping its 3 million existing subscribers as it seeks to
preserve cash.


P&O PRINCESS: Investors Back Royal Deal Despite Referral
--------------------------------------------------------

Investors of London-based cruise operator P&O Princess have
maintained their support for a proposed $7 billion merger with
Royal Caribbean Cruises Ltd over a rival takeover bid from
Carnival Corporation, as competition regulators, the Office of
Fair Trading, referred the plan to the Competition Commission,
the Times reported.

The Commission is expected to take until the end of May to make a
recommendation.

Carnival has been attempting to woo P&O shareholders ahead of its
shareholder meeting of February 14, to go for their recently
improved bid of 3.5 billion pounds ($5 billion).

P&O Princess had already rejected Carnival's bid in December,
saying a merger would be subject to more antitrust scrutiny than
a deal it has with rival cruise line operator Royal Caribbean
Cruises.  
  
The world's three biggest cruise liners are engaged in a bid
battle as they seek to cut costs, boost market share and reduce
overcapacity as the global economic slowdown leads holidaymakers
to scale back travel.  
  
Schroder Salomon Smith Barney is advising P&O Princess on the
deal. Goldman, Sachs & Co. and Cazenove & Co. Ltd, which are
regulated in the United Kingdom by the Financial Services
Authority, are acting for Royal Caribbean, while Merrill Lynch &
Co. and UBS Warburg are advising Carnival.

                                   ************

         S U B S C R I P T I O N   I N F O R M A T I O N

Troubled Company Reporter -- Europe is a daily newsletter co-
published by Bankruptcy Creditors' Service, Inc., Trenton, NJ
USA, and Beard Group, Inc., Washington, DC USA. Kimberly MacAdam,
Salve M. Mordeno and Maria Lourdes Reyes, Editors.

Copyright 2002.  All rights reserved.  ISSN 1529-2754.

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